How will the Apprenticeship Levy be Calculated?
Each employer will receive an allowance of £15,000 to offset against their Apprenticeship Levy payment. In practice, this means that the Apprenticeship Levy will only be paid by businesses whose annual wage bills are in excess of £3 million. Smaller employers will not pay the Apprenticeship Levy and will continue to be able to access Government support for apprenticeships.
In basic terms, the company's payment will be based on their PAYE wage bill then deduct £15,000:
Employer of 250 employees, each with a gross salary of £20,000:
Paybill: 250 x £20,000 = £5,000,000
Levy sum: 0.5% x £5,000,000 = £25,000
Allowance: £25,000 - £15,000 = £10,000 annual levy payment
Employer of 100 employees, each with a gross salary of £20,000 would pay:
Paybill: 100 x £20,000 = £2,000,000
Levy sum: 0.5% x £2,000,000 = £10,000
Allowance: £10,000 - £15,000 = £0 annual levy payment
The new charge will be imposed from April 2017 and help ensure that big business shoulders the cost of training workers, George Osborne said. But business groups have described the levy as a new "payroll tax".
January 13, 2016 | Share: